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JAKE TAPPER, CNN HOST: The report comes out. It says James Comey screwed up. But did the FBI ultimately help Donald Trump?

THE LEAD starts now.

It's out. The long-awaited report on the FBI's handling of the Hillary Clinton e-mail case blames the now fired FBI Director James Comey. Does it let President Trump off the hook for firing him, though?

North Korea basking in the propaganda. State media proudly showing President Trump returning a salute from a North Korean general, as the president rhetorically defends one of the most oppressive leaders in the world.

Plus, suing the Trumps. President Trump unloading as the New York attorney general sues him and his grown children and tries to dismantle the Trump Foundation.

Good afternoon. Welcome to THE LEAD. I'm Jake Tapper.

We begin with the politics lead today.

The highly anticipated report from the Justice Department's inspector general examining how top federal officials handled the investigation into Hillary Clinton's use of a private e-mail server, well, it just dropped like a bomb in the J. Edgar Hoover Building, assailing the decisions made by former Attorney General Loretta Lynch, former FBI Director James Comey, FBI agents whose biased anti-Trump texts the inspector general finds deeply troubling.

Repeatedly, Inspector General Michael Horowitz says he found explanations from the aforementioned to be -- quote -- "unpersuasive." And yet the top line here in this 568-page report, the I.G. found no evidence that political bias impacted the decisions leading up to the decision to not prosecute Hillary Clinton, which is not to say that the inspector general didn't find a lot to criticize, concluding that former FBI Director James Comey deviated from the bureau's norms in giving that July 2016 press conference about the Clinton case and deviated from the norms in the October 2016 letter to Congress reopening the matter.

Also revealed in this report were more text messages exchanged between former FBI lawyer Lisa Page and FBI official Peter Strzok, who was an investigator on both the Clinton e-mail case and the Trump-Russia probe, before he was removed from that latter investigation, including this stunning exchange from August 2016, where Page questions -- quote -- "Trump's not ever going to become president, right? Right?"

And Strzok replies: "No. No, he's not. We will stop it."

The inspector general writing in response to those text messages -- quote -- "Although we found no documentary or testimonial evidence directly connecting the political views these employees expressed in their text messages and instant messages to decisions made about the Clinton investigation through July 2016, the messages cast a cloud over the FBI investigations to which these employees were assigned."

Now, you might recall, I asked former FBI Director Comey about the previously released messages between Strzok and Page when I spoke to him in April. And he admitted he understood the concern.

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TAPPER: Put yourself in Donald Trump's shoes for one second. You're Donald Trump and you feel this is unfair, this investigation.

You find out that Peter Strzok, the lead FBI agent, is texting somebody disparaging things about you and then you find out that he's the one that actually helped conduct the Hillary Clinton interview, and he called you an idiot. Wouldn't you think that this whole thing was unfair and politicized?

JAMES COMEY, FORMER FBI DIRECTOR: Sure. I get why he would very concerned about that.

It's the reason Bob Mueller removed Peter Strzok, who is an excellent agent, but removed him from that investigation. It's poor judgment and it shouldn't happen. So I get the concern about it.

In fact, the I.G. calling that decision to call that press conference extraordinary and insubordinate. Comey, of course, has previously said he cut Attorney General Loretta Lynch out of the process in part because of her tarmac meeting with former President Bill Clinton. But the I.G. concluding that none of his reasons justified withholding his decisions from the attorney general and other top Justice Department officials. So this is directly from the I.G. report.

It says: "While we did not find that these decisions were the result of political bias on Comey's part, we nevertheless concluded that by departing so clearly and dramatically from FBI and department norms, the decisions negatively impacted the perception of the FBI and the department as fair administrators of justice."

The I.G. even continued on to criticize more, saying: "We found it extraordinary that, in advance of two such consequential decisions, the FBI director decided that the best course of conduct was to not speak directly and substantively with the attorney general about how best to navigate those decisions."

And, of course, Jake, Comey has repeatedly defended his actions, especially in his recent book, "A Higher Loyalty." But the I.G. today just not finding that these explanations are sufficient -- Jake.

TAPPER: Yes, unpersuasive is the word he uses repeatedly.

[16:05:00]

What does the inspector general have to say about October 2016, when Comey wrote a letter to Congress basically announcing to the world just a week-and-a-half before the election that the Clinton case had been reopened?

SCHNEIDER: Right.

Comey, he's faced a lot of criticism for alerting Congress just 11 days before the election, especially when the bureau doesn't comment on pending investigations.

He's defended his actions, saying that he felt he had an obligation to alert Congress to correct that prior testimony that he gave. But, again, the I.G. finding fault in all of it, saying: "We found no evidence that Comey's decision to send the October 28 letter was influenced by political preferences," but he continued to say, "We found unpersuasive Comey's explanation as to why transparency was more important than department policy."

So, again, a scathing criticism there of James Comey, but, Jake, Comey has said in a statement today that he respects these conclusions, though he doesn't necessarily agree -- Jake.

TAPPER: All right, Jessica Schneider, thanks so much.

Let's go to the White House right now, where we find CNN's Pamela Brown.

Today is his birthday. Deputy Attorney General Rod Rosenstein briefed the president on the report. We haven't heard from him yet directly on Twitter. Is the White House indicating that this is the gift he wanted?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, the White House is certainly seizing on some of the findings in this inspector general report.

No surprise there, Jake, with Sarah Sanders, the press secretary, coming out during the press briefing today saying that the findings reaffirm the president's suspicions about Comey, the former FBI director, whom he fired last May, and who he recently tweeted about, saying that he should be thanked for firing him.

So the White House using this report to further justify the president's actions in firing James Comey. Sarah Sanders also saying that it shows and reaffirms the president -- what the president has been saying, that there's political bias within the FBI.

Here's what she told reporters.

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SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: There are a lot of things in this report that not only worry those of us in the administration, but should worry a lot of Americans, that people played this political bias and injected that into a department that shouldn't have any of that.

(END VIDEO CLIP)

BROWN: And it's worth reiterating, while this report was a sharp rebuke of James Comey, as well as the FBI, the report also said, as you had pointed out, that James Comey was not politically motivated in the decisions he made.

And it also said that there was no evidence political views directly affected the specific investigative decisions in regards to the text exchange between Peter Strzok and Lisa Page, where Peter Strzok had texted that we will stop Donald Trump from winning the election.

Sarah Sanders also said that while she hasn't asked the president about whether Peter Strzok should be fired from the FBI, she believes that the answer would be, yes, he should be -- Jake.

TAPPER: All right, Pamela Brown at the White House for us.

Here for more, CNN chief legal analyst Jeffrey Toobin and former FBI supervisory agent Josh Campbell, who worked for FBI Director Comey in 2015 and 2017.

Let's start with this extraordinary exchange, Josh, between -- they were lovers and obviously FBI colleagues, Peter Strzok and Lisa Page in August 2016.

This is after the Hillary Clinton e-mail investigation, for all intents and purposes, had ended. And the Russia investigation was going on.

Now, speaking of that exchange, the inspector general writes: "It's not only indicative of a biased state of mind, but, even more seriously, applies a willingness to take official action to impact the presidential candidate's electoral prospects. This is antithetical to the core values of the FBI and the Department of Justice."

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: This is a damning report. There's no question about that. It was done thoroughly by an independent body whose job is to police those who have these law enforcement powers.

That said -- and I'm the first to admit that Lisa Page and Peter Strzok, I think, have caused more damage to the FBI's reputation than anyone I can remember in recent history by these revelations, by these discussions, by this bad judgment.

That said, within the FBI, I don't think that there's any single point of failure. So, obviously, you look at these abhorrent texts, these exchanges in which we will have to make sense of what they mean.

If you're in the FBI and you're in a position of authority that Strzok or Page were in, if you were to attempt to influence an investigation for personal political reasons, it wouldn't stand, because you would have people up and down the chain of command who would look and say, that's not the investigation that we conducted. That's not the facts that we found.

So, it looks terrible. It's something that they need to continue to investigate to determine whether there was influence. The bottom line for me in reading this report is, the inspector general says there wasn't political influence that impacted the investigation.

Because the inspector general is very specific about, he doesn't think that there's any evidence that political bias played a role in everything in Chapter 5. And Chapter 5 has to do with the Hillary Clinton investigation up until the decision to announce in July 2016 that it's over.

But he does say that he suspects Strzok did have a bias or at least bias may have played a role when it came to the decision to sit on the Weiner laptop.

[16:10:03]

Comey told the Office of Inspector General, had he known about the laptop in the beginning of October, and thought the e-mail review could have been completed before the election, it may have affected his decision to notify Congress.

So, here's what happened. Peter Strzok, according to the inspector general, sat on the laptop. They find no persuasive evidence as to why they didn't immediately go into the Weiner laptop when they got it at the end of September.

I want to get you to play in this, Jeff.

The only way they look into it is because people at the U.S. attorney's office for the Southern District of New York start asking about it. That's what the inspector general says. Then they do the warrant. Then Comey notifies Congress. Then history perhaps is changed.

So, Strzok, if you read behind the lines of this report, may have actually -- his bias for Hillary might have cost Hillary the election.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: That's why, I mean, you know, real life is so complicated, is that he could have -- if he had simply come forward at the beginning and, as soon as he found out about this laptop, and said, let's look into this, let's get it done, they could have gotten rid of the whole issue before -- with a reasonable amount of time before the election, so that Comey wouldn't have had to go to Congress.

So, as you point out, this is one of the incredible ironies -- and it certainly was news to me in reading the report -- that Strzok actually wound up helping Trump, even though he said these now notorious things in his -- in these texts.

His behavior actually contributed to Comey's still, frankly, to me, unbelievable and clearly criticized here decision to make that announcements 10 days before the election.

TAPPER: Josh, you were there. So, let me just ask you, and then obviously whatever you want to say.

CAMPBELL: Yes.

TAPPER: Do you find it plausible that if Comey had found out about the laptop, the warrant had been executed when they found it, at the end of September, that he would not have felt the need to go to Congress and notify them?

CAMPBELL: Well, it's a good question.

I think what his mind-set was -- and he has said this publicly -- is that he had told Congress before the investigation was closed, and now he felt compelled to tell them that that's no longer the truth, because we have reopened this investigation.

I'm the first one to look at what transpired and try to look obviously with hindsight. We can't change the past, but wonder, had that laptop been investigated, had that search warrant been obtained, Hillary Clinton might have been president, probably would have been president, because if you look at what happened investigatively, the FBI in a matter of days was able to look at those e-mails and determine that they were duplicates and that they were no longer applicable to the investigation.

TAPPER: Ironically and inadvertently, but that is the suggestion being made.

CAMPBELL: Yes.

But I still believe, I still believe that there is no single point of failure in the FBI. I think that there's a lot of incompetence here that we need to look into. Obviously, we're going to hear from Chris Wray about what he is doing to right these wrongs and ensure this never happens again.

But, again, I look at these people and think that this is probably more incompetence than politics playing a role in their decisions.

TOOBIN: But the paradox of this report is that there are mistakes galore.

TAPPER: Oh, yes.

TOOBIN: But they don't all point in one direction.

TAPPER: No, there are a ton of them.

TOOBIN: But they don't all show that they were helping Trump. They don't all show that they were helping Hillary Clinton.

They go in different directions. So you see, in the politically polarized environment in which we live...

TAPPER: Yes.

TOOBIN: ... Republicans and the White House focusing on that -- on those text messages.

We see Democrats focusing on how the inspector general criticizes Comey for holding that news conference -- for announcing that news 10 days before the election.

There's enough in both of these for both camps to find things to criticize.

TAPPER: Yes.

And, in fact, the report suggests -- again, I'm reading between the lines -- but they don't -- the inspector general doesn't think that Comey was politically motivated in any of his decisions. But he does seem to lean into the idea that -- I think he uses the phrase Comey alone believed that he could preserve the reputation of the FBI. He alone believed, which kind of gets to the criticism that James Comey gets a lot, including on this show, that he has an infatuation with his own sense of integrity.

CAMPBELL: Right. Well, it's been called sanctimonious by some.

But, again, I think, as people look back on this, his decisions are fair game. I mean, you don't step into the position of FBI director with all the responsibility that comes with that, and not understand that you're going to be criticized for decisions that you make.

He's getting that criticism. It's probably going to last a long time.

TOOBIN: It's been my fate to cover a lot of high-profile cases in all sorts of situations.

And it seems like what -- the mistake always that is made is that people make special rules for special cases, instead of just following the rules.

TAPPER: Right.

TOOBIN: When the FBI doesn't prosecute someone, they shut up. That's the rule.

But, instead, Comey invents this convoluted justification for holding this news conference. And it was, as the inspector general concludes, and I agree, a bad idea.

If he had simply followed FBI policy, I think everyone would have been better off.

TAPPER: All right, Jeffrey Toobin and Josh Campbell, thanks so much.

Appreciate it.

Does the inspector general report benefit President Trump? Does it help him politically? Does it help Democrats? Does it really just depend who you ask and what channel you watch?

Stay with us.

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TAPPER: Does the inspector general report benefit President Trump?

[16:15:03] Does it help him politically? Does it help Democrats? Does it really just depend who you ask and what channel you watch?

Stay with us.

(COMMERCIAL BREAK)

TAPPER: Welcome back.

A new inspector general report faulting several FBI officials and Justice Department over how they conducted the investigation into president candidate Hillary Clinton and to a lesser degree Donald Trump.

My political panel joins me now.

Mary Katharine Ham, let me start you. Ultimately, do you see this report and its criticisms as helpful to President Trump in his battle against the Mueller investigation and the FBI or hurtful or a little of both?

MARY KATHARINE HAM, CNN POLITICAL COMMENTATOR: Yes, I think it helps a bit because there are two sort of battling narratives here. One, as this sort of Comey story that the FBI and all of its employees are perfect upstanding citizens and can never do wrong or lie or mislead anyone and to suggest otherwise is insane.

Then there's President Trump's story which is just that there is a whole cavalcade of bad actors and that no one is doing the right thing.

The truth is somewhere in the middle. It won't surprise you to find out that I think that.

[16:20:02] But I do think the idea that these texts are going back and forth between Strzok and Page who are not in low levels --

TAPPER: No.

HAM: -- of two different very important politically charged investigations and they're very explicit and very, frankly, dumb in the way they're communicating their political biases, that's not a good story and it's not a Republican's pounce story. It's just a bad story for the FBI.

TAPPER: Yes, and, Angela Rye, what do you think? What do you make of this all?

ANGELA RYE, CNN POLITICAL COMMENTATOR: Well, you know, Jake, I was at Pandora yesterday and I was asked about a commentator, a CNN commentator whose views I respected even when we disagree and that's Mary Katharine Ham and this is why. You know, when we have a situation like this where historically the FBI has demonstrated a challenge in treating people with power fairly, whether we're talking about Martin Luther King or we're talking about a situation involving Hillary Clinton, James Comey's justification being something like she's going to win anyway, it's ridiculous.

Rules have to be the rules across the board. Jeffrey Toobin just made that point, I think it's a profound point and at some point, governmental agencies are going to have to apply the rules the same to every actor regardless of the power in which they hold.

I think that's a great point, Mary Katharine. I agree with you. TAPPER: All right. Nia-Malika, what do you think? Ultimately, does

this help Trump in his argument against the FBI?

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: I think it does. Those very easy to read easy to understand text messages between Lisa Page and Peter Strzok, this idea that she's nervous about a Trump presidency and he says we won't let it happen, we'll stop it.

So we haven't heard from the president yet, I think people are wondering what he's going to tweet. But you can imagine, it is his 72nd birthday. This in a lot of way is a very good gift for him. We heard Sarah Sanders obviously from the podium today, saying this reaffirms some of their concerns. And so, yes, I think this is a good day.

You know, I also think there's something for everyone here, right? If you're a Democrat, you look at this and you say, James Comey did act inappropriately and you can also perhaps argue that his actions cost Hillary Clinton the election. She's argued that in the last days, that October 28 memo to Congress saying that the investigation was going to be reopened into the Weiner e-mails, you can argue that cost her some of her support cratered in those last days, at least according to some of the pollsters.

So, yes. I mean, also, I think no one -- there won't be a lot of agreement here, right? If you look at what happens out of the Mueller probe, you imagine that there's never going to be a real consensus about this and that people are going to be arguing about this for decades.

TAPPER: The one thing that's clear and the inspector general finds fault with the decisions of a lot of people, one of them we haven't talked about much yet is the former Attorney General Loretta Lynch and specifically her politeness, shall we say, when former President Bill Clinton on a tarmac in Arizona walked over to her airplane and got on the plane even though DOJ was investigating his wife Hillary Clinton at the time.

I asked Loretta Lynch about that not long before she left the administration. Let's take a listen.

(BEGIN VIDEO CLIP)

TAPPER: Looking back, do you wish that when he came over, you said, we really shouldn't talk, it would be really inappropriate and hello and good-bye?

LORETTA LYNCH, FORMER ATTORNEY GENERAL: So as I've said at the time, I think days after that meeting, I regretted not seeing that issues and not seeing around that corner. I wish I had seen around that corner and not had that discussion with the former president as innocuous as it was, because it did give people concern, it did make people wonder, is this going affect the investigation that's going on. And that's not something that was an unreasonable question for anyone to ask. TAPPER: The inspector general did conclude that they couldn't find any evidence that they talked about the case but the inspector general also said that Attorney General Lynch's failure to recognize the appearance problem created by former President Clinton's visit and to take action to cut the visit short was an error in judgment. Her efforts to respond to the meeting by explaining what her role will be in the investigation going forward created public confusion and did not adequately address the situation.

So, again, there's a lot of blame to go around. But, Angela Rye, Bill Clinton and Loretta Lynch in some ways set this in motion?

RYE: Yes, I think the optics are definitely problematic but again, like we're revisiting this so many months after the election and the inspector general has already concluded the very same thing that high- level campaign officials concluded, that lawyer -- legal analysts and political analysts concluded, that the American public concluded. So, I don't know what this does to advance the narrative or change the culture of the FBI or the Department of Justice overall.

I think the reality of this again is this is a perception of power thing, right. I think that the other issue that we have quite frankly is how Bill Clinton or the Clinton family overall is perceived. And in this regard, using power -- their power to influence the outcome of something.

[16:25:06] It's not much different from Donald Trump and for all of the Hillary supporters out there, I'm not saying they're the same. But I'm saying the way in which power has used --

TAPPER: Too late, Twitter is going crazy, Angela. I'm sorry.

RYE: The way power is use it can get hazy and it confuses people who don't have access to that same power.

TAPPER: All right. Well, stick around because we're going to talk about the Trumps next. Donald Trump and his kids sued by the New York attorney general accused of using the Trump Foundation as their own personal piggy bank. Stay with us.

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TAPPER: President Trump is coming out swinging, attacking New York prosecutors who dropped a new lawsuit on him today. Happy birthday, Mr. President.

The state's attorney general is suing Donald Trump and his three oldest children, Don Jr., Ivanka and Eric Trump, claiming they all repeatedly and illegally used the Trump Foundation charity to benefit their father, his businesses and his 2016 campaign.

The New York attorney general says, quote: The Trump Foundation was little more than a checkbook for payments for Mr. Trump. Among the many complaints that the Trump foundation used tax deductible donations to settle legal claims against his Mar-a-Lago resort.